A&W is launching a new franchise growth initiative. First-year royalties for new operators will be reduced from five percent to two percent.
Royalties will be adjusted to three percent in the second year. Each year royalties will increase until they hit five percent in the fourth year. An incentive program for current operators will be announced soon.
According to A&W President Paul Martino, “Reducing royalties enables operators to spend more on their operations in those crucial first years.”
Royalty discounts will save the owners of a restaurant with $1 million in sales $60,000 in royalties. “As a franchisee-owned brand, A&W is in a unique position to make decisions that are best for the brand and its operators over the long haul, not the next quarter”
A&W has been working on a turnaround since being acquired from YUM! Brands in 2011. Comp-sales have grown more than 32 percent, with AUV’s also up by a third.